1. Field of the Invention
The present invention relates to a method and associated system for computerized monitoring of investment trading and more specifically it relates to a system which as to a specific trader and a specific investment obtains current information regarding selected trading parameters and compares it with historic trading data regarding the same and applies rules to determine if a violation of the rules has occurred.
2. Description of the Prior Art
It has long been known to employ computerized systems to process data, store the same and provide for output and various formats as desired. It is also been known to use the same for investment purposes. See, for example, U.S. Pat. Nos. 5,749,077 and 5,893,079.
In recent years, the need for a system to provide more effective and timely monitoring of investment activities has become acute. More specifically, numerous instances of improper conduct have resulted from “market timing” in the trading of mutual funds. For example, individuals have been known to engage in frequent purchases of mutual funds in large quantities at an early phase of an upward movement of the market and selling the same after a brief elapsed period as the market moves upward. The frequency of such transactions has reached the point in many instances of being burdensome on the mutual fund. The mutual fund must at times be forced to sell investment securities at a less than preferred time in order to reimburse such traders for their sizable redemptions. Also, the increased trading volume increases the mutual fund's transaction costs. This results in smaller investors being hurt as the market timing traders deprive the mutual fund of doing the most efficient job of maximizing the return for other investors. In addition, there have been instances of late trading involving transactions which were permitted to occur illegally after the market had closed, thereby permitting the individuals engaging such trading to take advantage of late-breaking news in anticipation of the response by the market upon opening the next day.
There remains, therefore, a real and substantial need for an effective automated system which can monitor on a rapid and reliable basis improper market timing behavior.